• by Mark Walsh  @markfwal, August 18, 2010

With Facebook expected to announce its long-awaited location-based service later today, speculation has heated up about exactly what form it will take. Will it compete head-to-head with existing social location competitors like Foursquare and Gowalla, or encourage integration of third-party check-in services?

The Inside Facebook blog suggested the new location service could be something like Foursquare lite, allowing users to do simple things like attach a location to a status update, or "Like" a physical place. Business Insider surmises it will eschew the gaming elements found in other location services and instead encourage users to check in to the Facebook pages of local stores and businesses as a way to increase merchant activity on the social network.

Facebook indicated in March that if it were to add a location-sharing feature, it would allow users to participate on an opt-in basis -- a step that could help it avoid the privacy stumbles that have plagued Facebook in the past. But whatever type of location offering Facebook rolls out, it's likely to further boost mobile use of the social network.

The company says it already has 150 million mobile users worldwide and that people accessing Facebook on mobile devices are twice as active as desktop users. If people start using Facebook to check in from bars, restaurants, stores and other places via cell phones, that could drive up both the company's mobile user base and activity among existing mobile users.

That in turn could spur more retailers and other businesses to offer mobile coupons or set up mobile rewards programs in conjunction with a new Facebook location-sharing feature. In that vein, it wouldn't be surprising to see the company launch the location service with some kind of check-in offers from retail partners like Starbucks or H&M that have been active marketers on Facebook.

Starbucks has already run mobile promotions with Foursquare and Brightkite, so partnering with Facebook on similar location-based offers would be a natural step.

And to the extent advertisers want to lure on-the-go consumers from Facebook to their own sites, a location-based service on the social network could encourage brands to upgrade their mobile Web presence.

The initiative might also lead Facebook to sharpen its focus on monetizing the mobile versions of the site, which the company to date has largely left ad-free in the interest of offering a simplified mobile experience. But that could change if Facebook takes on a bigger role in helping companies to run advertising or set up marketing programs tied to the new location service.

That's not to say Facebook is going to blitz mobile users with coupons and offers tomorrow, but that a location-based service should accelerate mobile usage of Facebook, which in turn will boost mobile marketing on the site.